4 ms·

1. Cheap, easy debt. 2. People with access to #1 take it and buy properties (either as rentals or AirBnB). 3. From #2, use properties for collateral on other

1. Cheap, easy debt. 2. People with access to #1 take it and buy properties (either as rentals or AirBnB). 3. From #2, use properties for collateral on other loans, rinse and repeat (even scarier, banks will rehypothecate that collateral). 4. Charge what you want because there's no competition as everyone needs a place to live. The implosion of this will be when a combination of new debt not being available to service old debt collides with properties being left unoccupied due to exorbitant costs. I'm currently renting while I build my house and the development I'm living at was fully rented last year (near a college), but this year I've been counting and there are ~3-5 empty town houses for rent here and the school year just started. My rent went up ~$150/month, too, arbitrarily with no improvements/added services. I view it as a short-term cash grab that will find a lot of Grant Cardone types scrambling when it (predictably) blows up in their faces. My bet is that if you can live modestly and squirrel away cash, things are going to get super cheap for a short period and then the dollar will hyperinflate when none of the debt can be serviced (assuming this drop off triggers a massive QE run). Then: CBDCs and a new serf class will be born.

slaw 4y ago
With inflation 9.1% and no action from Fed to limit it, 2.25% interest rate is a joke, there will be no short period when things will be super cheap.
- rglover 4y ago
  This is where the QE comes in (assuming it does). That will give a false hope for a very short time (my bet is weeks/months at most) and then hyperinflation will take over as people beg for QE to continue like a crackhead finding a rock under the sofa.
- nine_zeros 4y ago
  1. They haven't stopped raising rates. They are just doing it one step at a time. 2. QT is also going to affect interest rates on MBS, which will reflect in mortgage interest rates.

slaw 4y ago

With inflation 9.1% and no action from Fed to limit it, 2.25% interest rate is a joke, there will be no short period when things will be super cheap.

rglover 4y ago
This is where the QE comes in (assuming it does). That will give a false hope for a very short time (my bet is weeks/months at most) and then hyperinflation will take over as people beg for QE to continue like a crackhead finding a rock under the sofa.
nine_zeros 4y ago
1. They haven't stopped raising rates. They are just doing it one step at a time. 2. QT is also going to affect interest rates on MBS, which will reflect in mortgage interest rates.